164 The Marketing Book
Suppliers’ relationships with their custom-
ers cannot be treated in isolation, as they will be
increasingly affected by these trends in the
supply strategies of customers. Suppliers also
need to consider the scope of what they offer,
their posture and the structure of their cus-
tomer relationships. In terms of their offerings
to customers, the supplier may have to offer
technological innovativeness and competence,
adaptations and superior logistics. The posture
or type of interaction that occurs between
companies will vary from simple transactional
relationships to close co-operative relationships
(Hakansson and Snehota, 1990). The structure
of the customer base is measured by the type
and number of relationships the supplier has.
These three factors interact and determine how
the suppliers allocate their limited resources
among their customers.
An understanding of the focal company’s
position in the network and how the inter-
actions in one relationship may affect the others
is necessary for performing relationship portfo-
lio analysis. The aim of relationship portfolio
analysis is to provide a framework for analys-
ing current relationships to enable the tactical
and strategic management of relationships in
the future (Zolkiewsi and Turnbull, 2001).
These authors argue that the approach is
equally important to both supply and procure-
ment management. This approach highlights:
existing relationships which need to be
developed;
relationships which should be maintained at
the ‘status quo’;
relationships which should be terminated;
areas where new relationships could be
developed;
areas where different elements of the
marketing offer should be emphasized.
Essentially, the analysis results in the grouping
of similar relationships, whether they are sup-
pliers or buyers, and is a development of
segmentation. It allows the characteristics of
the different groups of customers and suppliers
to be analysed and is an important aspect of the
management of relationships.
A number of relationship portfolio models
have been developed over the years: Fiocca
(1982), Campbell and Cunningham (1983), Sha-
piro et al. (1987), and Turnbull and Zolkiewski
(1997) focus on relationships with customers,
whereas Krapfel et al. (1991) and Olsen and
Ellram (1997) focus on relationships with sup-
pliers (see Zolkiewski and Turnbull, 1999, for a
review of the models). These models are quite
problematic as they vary considerably in rela-
tion to the actual variables used, the number of
variables used and the number of steps used to
integrate the information. Practitioners need to
use their insight and judgement as well as
considering carefully the reasons why they are
using relationship portfolio analysis when
selecting a model. Although all the researchers
recognize the major difficulties inherent in the
implementation of such an analysis, they agree
that, at least conceptually, relationship portfolio
analysis, planning and management make an
important contribution to effective marketing
management.
Key account management is another tool
which entails examining relationships from a
strategic perspective. It is an approach usually
adopted by the supplier who aims to build a
portfolio of loyal key accounts by offering
them, on a continual basis, a product/service
package tailored to their individual needs
(McDonaldet al., 2000). Once again, an under-
standing of the focal company’s position in the
network and its relationships is vital for decid-
ing which relationships should be developed
into key accounts. Relationship portfolio analy-
sis could be used to provide a strategic per-
spective for selecting key accounts (Zolkiewski
and Turnbull, 2001). This approach would be an
improvement on past approaches put forward
by Barrett (1986) and Boles et al. (1999), who
suggest that key accounts should be large
customers relative to the company’s typical
customer. This is an inadequate strategic
approach as it focuses on high volume buyers
only. The use of relationship portfolio analysis